Gross: Recovery to Fizzle When U.S. Pulls Support

Bond fund manager extraordinaire Bill Gross says the U.S. economic rebound will be tepid, thanks to the withdrawal of government support and the weak job market.

The economy grew 5.7 percent in the fourth quarter and could well expand 4 percent in the first half of this year, but then it will fizzle out, Gross says.

“The economy and the asset markets have been reflated by the wallets and checkbooks of government, not the private balance sheet,” he told CNBC.

“Now a lot of that has been halted and in some cases withdrawn. The credibility of weak governments – Greece, Portugal, Spain and Ireland – and the sustainability of stronger ones are being questioned,” Gross says.

That makes it doubtful that private demand can soon substitute for government demand.

Bond fund manager extraordinaire Bill Gross says the U.S. economic rebound will be tepid, thanks to the withdrawal of government support and the weak job market.
The economy grew 5.7 percent in the fourth quarter and could well expand 4 percent in the first half of this...